Up in the Air

Published online: Feb 12, 2022 Articles Buzz Shahan, Chief Operating Officer, United Potato Growers of America
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This column appears in the February 2022 issue of Potato Grower.

The problem with parachutes is that the parachutist has limited options over where he or she is going to land. Decades ago, a group of parachute aficionados got together and decided to change things; they came up with a reshaped parachute. They abandoned the mushroom-shaped chute for a square one not unlike a glider wing. The glider-wing version has ropes attached to the corners that allow the parachutist to reshape the parachute’s contour and thereby guide its direction. Now, the parachutist can select a landing spot and guide himself safely to it. Anyone who saw the movie The Longest Day and watched parachutists landing in trees and hanging from church steeples, there to be machine-gunned down by the enemy, can appreciate the value of picking one’s landing spot.

Continuing the parachute analogy, parachutists got tired of the parachute telling them where they were going to land. They changed things. A forward-looking group of potato producers did the same thing; they came together from all over the U.S. and Canada to form United Potato Growers of America and United Potato Growers of Canada. These groups tie data ropes to corners of potato markets so that producers can use those ropes to influence where they land. Anyone with eyes to see can appreciate those potato-producing regions and producers that utilize those economic ropes to make their businesses land in the right spot. New tractors, new potato harvesting and handling equipment, new storages, new center pivots, and new pickups tell the tale—not to mention smiling bankers and producers. Life is good when you run your business as a business.

United ties data ropes to corners of potato markets so that producers can use those ropes to influence where they land.

Due to current government economic policy, the business of producing potatoes, as with every other production business, faces challenges greater than ever before. Comparing 2021’s growing cost to 2021 pricing, producers are coming out on top. What about the 2022 crop? If that crop equals 2020 production—and estimates predict that it will—it will give 2020 pricing. What about 2022 production costs? Estimates are that they will rise by 15 to 20%. Putting those together—2022 production costs minus 2020 pricing—equals disaster. This is a tough situation to say the least. As a producer, how are you going to manage it?

United is not a newcomer when it comes to facing a tough situation. We know how to guide potato producers legally and safely through these uncertain times. Do not make the mistake of thinking that you, as a single entity, can know what to do. Certain shipping entities profit because they sit beneath the umbrella of others that know what they are doing. Free riders happen. Arrogance and cynicism happen. If you are in a region that cares nothing about balancing the supply/demand equation, this is a good time to pay attention. Good business managers are neither arrogant nor cynical. They are realists. Good business managers know their market and how to fit their crop into it to assure fair value. United has the data to guide that process. United knows the ropes, so to speak, and welcomes you, Mr. Producer, to join with us to help you land in a safe spot.